The
Army's logistics mission embraces materiel, personnel, facilities, and
services. To carry it out, the Army must acquire, move, distribute, maintain,
store, and dispose of materiel; move and support personnel; acquire, construct,
operate, maintain, and dispose of facilities; and furnish services. In fiscal
year 1969 the over-all task was generally shaped by the war in Vietnam and the
Army's million-and-a-half strength and worldwide deployment. Once again efforts
were directed toward achieving a balance between the requirements of the war,
the support of Army forces elsewhere, and the general progress in long-range
programs so essential to future readiness, and deterrence.

Procurement

For the
past decade the procurement objectives for materiel support of general purpose
forces have been set out by the Secretary of Defense in his annual logistics
guidance. The guidance establishes a balance between programed forces and the
equipment, ammunition, secondary items, and consumables required to sustain
them in combat. It specifies the number of Army division forces to be equipped
and supported, and the Army's budget is developed accordingly.

In
fiscal year 1969 the budget for the procurement of equipment and missiles
totaled almost $6.8 billion, up some $340 million over 1968. It was designed to
achieve and maintain prudent inventory levels in the light of operations in
Southeast Asia. Over $4.7 billion was for procurement related to the war. The
table below compares costs in various commodity areas over the past two years.

PROCUREMENT OF EQUIPMENT AND MISSILES, ARMY (PEMA)

(in millions of dollars)

Commodity

Fiscal year 1968

Fiscal year 1969

Percent of Change

Aircraft

962.3

660.9

-31

Aircraft spares and repair parts

300.8

154.4

-49

Missiles

455.3

843.0

+85

Missile spares and repair parts

25.1

45.0

+79

Tracked combat vehicles

409.3

285.2

-30

Weapons and other combat vehicles

195.3

223.3

+14

Tactical and support vehicles

404.7

395.9

-2

Communications and electronics equipment

603.9

623.0

+3

Other support equipment

381.4

443.2

+16

Ammunition

2,361.1

2,994.7

+25

Production base support

345.8

166.3

-52

Total

6,445.0

6,784.9

+5

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Of the
more than $8.2 billion in contracts awarded during the year, $6.5 billion ($5.5
from current year and $1 from prior-year funds) was for the Army and $1.7
billion for customers ordering Army equipment.

Most of
the equipment and munitions delivered in the 1969 fiscal year were contracted
for in 1968. The following table illustrates the growth in deliveries since
1965.

MAJOR PROCUREMENT DELIVERIES

(In millions of dollars)

Fiscal year

1965

1966

1967

1968

1969

Total 1

2,355

2,937

5,407

7,657

8,411

Firepower

Ammunition

497

799

2,348

3,840

4,506

Missiles

451

362

392

436

542

Weapons and combat vehicles

409

322

467

498

771

Mobility

Aircraft

290

520

687

999

903

Tactical and support vehicles

296

423

560

687

797

Communications and electronics

265

336

491

711

581

Other support equipment

147

175

462

486

311

1 Includes reimbursable procurement for military
assistance and for U.S. Navy, Marine Corps, and Air Force.

As a result of these deliveries, the estimated value of major end item assets
on hand at the close of the fiscal year was $21.7 billion. The increase in requirements
was largely due to support of Vietnam operations, which involved expanded use
of aircraft and increased ammunition consumption for new and conventional weapons.
Other factors contributing to increased requirements and high costs were the
addition of temporary forces to maintain the ground defense posture, accelerated
production, and inflation. Deliveries resulting from the substantial procurement
funds appropriated for fiscal year 1969 and anticipated far 1970over $11
billion in two yearswill close a part of the gap between existing assets
and requirements.

Support of Operations in Southeast Asia

In the
four fiscal years from 1965 through 1968 the logistical base for U.S.
participation in the Vietnam War was constructed, linked with the home base,
placed in operation, and progressively enlarged to accommodate the expanding
U.S. commitment. As the buildup leveled off in 1969, the program to equip the
South Vietnamese forces to take on a larger share of the war was accelerated,
while logistic planning was focused on developing an orderly schedule of
actions to accompany U.S. withdrawals.

The adjustment of force levels,
combined with improvements in port capacity, ship availability, and depot
capability, brought an adjustment

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in the transportation phases of war support. In
fiscal year 1969 the capability to move over 900,000 short tons of materiel and
supplies per month over an 8,000-mile pipeline had been achieved, along with
the capability to rotate the theater's personnel on the short tour basis.

About 50 percent of all Army-sponsored cargo and passengers
moved to and from Southeast Asia during the year. The Military Sea Transportation
Service moved 9,122,200 measurement tons into the area, down by 97,600 from the
previous fiscal year. Cargo shipped by air totaled 221,500 short tons, up
22,900 over the previous year. Of the totals, 6,605,600 measurement tons were
shipped by surface and 131,900 short tons by air from the continental United
States. Over 14,000 short tons were airlifted by the Red Ball Express expedited
service.

Passenger movements were both inter- and intra-theater. During the fiscal year
947,900 passengers were moved from the continental United States to support
operations in Southeast Asia. Of the total, 863,700 were moved by air and 84,200
by surface; 150,400 moved within the theater.

A shallow draft port at Vinh Long became operational in February 1969, increasing
to 11 the ports used by the Army in South Vietnam: Saigon, Qui Nhon, Cam Ranh
Bay, Vung Tau, Vung Ro, Cat Lai-Nha Be, and Nha Trang as deep draft ports, and
Dong Tam, Phan Rang, Can Tho, and Vinh Long as shallow draft ports. Port congestion
is no longer a problem. The average time a deep draft ship waits for a berth
in Vietnam ports has been reduced from the 20.4 days of the critical 1965 period
to an average of less than 1 day. The deep draft ports have a daily "throughput"
capability of 26,000 short tons. (Throughput includes a variety of factors such
as berth-anchor capacity and discharge, onward movement, and destination reception
capability.)

Monthly throughputdischarge and outload combinedin Army-operated
ports in South Vietnam decreased by about 100,000 short tons during fiscal year
1969, the average dropping from 807,000 in the opening quarter to 728,000 in
the closing quarter. The decrease is attributable primarily to reduced tonnages
rather than handling capability, another reflection of the leveling-off process
in the theater.

Closely allied to the transportation phase of
military operations is supply support. Under current consumption factors, U.S.
Army personnel in Vietnam are using an average of 94.04 pounds of supply (of all classes) per man per day, compared with
45.34 pounds during World War II in the Pacific theater.

The Army's ammunition
support effort continued to expand during the fiscal year with the inclusion of
ground munitions support to Republic of Korea forces in Korea, and, in
Vietnam, to the Republic of Vietnam's Navy, Marines, and Air Force in addition
to its Army forces. Procurement and production of Army munitions for Southeast
Asia were based on continuing assessment of consumption experience and

72

force levels to insure
responsive support without overprocurement. In view of competing demands for
ammunition, the Military Services Ammunition Allocation Board controlled
apportionment of production deliveries among the military departments, while
the Department of the Army Allocations Committee for Ammunition performed the
same function for the Army. Careful and continuous monitoring of theater
stocks and shipments has kept the vast majority of items at the levels required
to meet combat needs.

Under the direction of the
Secretary of Defense, the Army provides a limited number of administrative and
general housekeeping items, packaged petroleum products, and subsistence items
to all U.S. forces in the II, III, and IV Corps Tactical Zones in the Republic
of Vietnam. The Navy provided similar support in the I Corps Tactical Zone. Extension
of the Army common supply support system and expansion of the categories of
items handled will depend upon the Army's general supply posture and further
direction from the Secretary of Defense.

Combat operations have placed a heavy burden on maintenance funds and activities.
The growth rate of the U.S. Army, Pacific, depot maintenance program, for example,
has been almost three times the worldwide rate. To shorten the maintenance cycle,
ease the transportation burden, and take advantage of favorable labor costs
in the Far East, maintenance work has been done as far forward as possible.
Some repairs have been undertaken in the theater that would not have been economical
in the continental United States. Depot maintenance is now performed in a score
of shops in Japan, Korea, Okinawa, and Taiwan, and the closed loop support program,
under which critical items are withdrawn, repaired, and returned to the user,
is now fully operational to support not only U.S. Army forces in Vietnam but
those in Thailand, Korea, Okinawa, Alaska, and Europe. The program embraces
86 major and 93 secondary items and in the past year over 40 line items were
removed from a critical supply status. The maintenance support capability in
the Pacific will be highly useful when and as the war is terminated and materiel
is redistributed.

As noted in last year's
report, the U.S. armed forces were left with $12 billion in surplus stocks at
the end of the Korean War. The high cost of identifying, processing, and
storing large amounts of excess materiel, coupled with rapid deterioration and
obsolescence, tends to encourage the early classification of war surpluses as
salvage. To insure that such waste does not occur in Vietnam, a program has
been going forward since November 1967 to identify excesses and redistribute
them according to need. Of the more than $700 million worth of identified excess
materiel in the Pacific by the end of the fiscal year, the Army reported
assets of $515 million, with approximately $177 million of these assets having
been redistributed.

73

The program to
improve and modernize the armed forces of the Republic of Vietnam, initiated in
the spring of 1968, proceeded during the fiscal year, with progress attested to
by the battlefield performance of Vietnamese forces and the announcement that
an initial increment of U.S. forces would be withdrawn. Force levels were
increased, funds allocated, procurement initiated, and equipment delivered to
augment stocks already on hand. At the year closed, the supply of the most
essential weapons and combat vehicles was well in phase with Republic of
Vietnam Army unit activation schedules and maintenance and attrition
requirements.

Support of Operations in
Europe

In the first quarter of fiscal year 1969 the major redeployment of Army troops
from Germany to the United States was completed. Two brigades of the 24th Infantry
Division (Mechanized), the 3d Armored Cavalry, and 78 support units were involved
in the move, completed on September 30, 1968. The majority of their equipment
was prepositioned in Germany against future need, and the units, although stationed
in the United States, remain committed to the North Atlantic Treaty Organization
and under the operational control of the Commander in Chief, U.S. Army, Europe.
To test their availability on call, the major 24th Division units and selected
support elements were deployed by air to Germany in January 1969 to participate
in Exercise Reforger I, using their prepositioned equipment.

As a part of the continuing effort to improve the U.S. logistic posture in
Europe, a study was made of the management considerations connected with prepositioned
materiel configured to unit sets. The appraisal addressed management procedures;
funding and construction of controlled humidity storage facilities; readiness
reporting; disposition of overage equipment; depot maintenance program data;
and storage, maintenance, and modernization policies.

In March 1969 the Secretary
of the Army approved the plan, proposed by the Commander in Chief, U.S. Army,
Europe, to reorganize the logistic system in Europe, and the majority of
actions embodied in it were completed in the final quarter of the fiscal year.
The reorganized structure consists of a theater army support command and two
corps support commands, and makes use of modern management techniques.

Under the military construction
program, the Army continued to fund the United States share of the NATO common
infrastructure program. The Congress authorized the $55 million budget
request, but appropriated only $47 million. The other NATO nations agreed to
share the cost of relocating U.S. facilities from France, and reimbursements
began in the fourth quarter of the fiscal year.

74

Materiel Maintenance

In fiscal year 1969 the Army obligated $791.8 million for depot maintenance
activities. Of this amount, $550.3 million was used to overhaul, convert, renovate,
modify, repair, inspect, and test materiel. The remaining $241.5 million was
used to plan and program maintenance activities; provide technical and engineering
services; and procure capital equipment and basic issue items. Of the grand
total, $649.5 million was directly related to maintenance support of the Army
buildup and operations in Southeast Asia.

Two worldwide depot
maintenance programing conferences were held in the Washington, D.C., area
during the fiscal year, one in December 1968 and the other in April 1969. The
1969, 1970, and 1971 fiscal year budgets were reviewed and the entire program
adjusted in the light of maintenance and repair schedules, the condition of
existing materiel, and projected requirements. Broad consideration and regular
updating are essential to insure that the program is responsive to the heavy
maintenance requirements placed on it, for the maintenance of materiel is as
important to combat readiness as the procurement of new stocks.

A joint Army-industry team, established to collect and evaluate data on armored
personnel carriers and tanks in Vietnam, completed its work in the report period.
One result of the appraisal was to change the standard overhaul frequency schedule
for the M-113 armored personnel carrier from 5,000 to 6,000 miles of operation.
The extension increases the operational availability of a vehicle by 20 percent
and saves millions of dollars in overhaul costs.

The Army-industry team mission has been expanded to include evaluation of data
on all combat vehicles worldwide. Evaluation of auto-frettage in gun tubes was
begun this year, along with a program to improve the techniques by which wear-out
and replacement factors for parts and components of tank retrievers are developed.

The Department of the Army prescribes
standards for the operational readiness of equipment that measure both
equipment and logistic support performance. The standards are considered to be
attainable and are consistent with equipment distribution, geographic
environment, usage, and command priorities. They have been established for each
major command and separately for Vietnam and the Reserve Components. Updated
readiness standards for Army ground equipment and aircraft became effective in
December 1968.

Army Aircraft

Worldwide readiness standards were set in 1969 at 80 percent for
fixed-wing and 75 percent for rotary-wing aircraft, with a weighted average of
76 percent for all aircraft.

75

Because of the large number of aircraft in Vietnam and the time required for
surface transportation from the United States, air movement of both aircraft
and components to the battle zone has become increasingly important. Aircraft
losses must be replaced immediately, either from new production or through repair
programs. Thus cargo planesC-124, C-133, C-141transport new aircraft
and parts to Vietnam and, bring back damaged or high-use aircraft for repair
and overhaul in the United States. Also helpful in keeping aircraft operational
is a new technique designed to diagnose an engine's condition. Called the spectrometric
oil analysis program, it improves the aircraft maintenance diagnostic capability
in Army units, reduces maintenance requirements, and promotes operational safety.
All Army aircraft installed engines were diagnosed during the year, and the
feasibility of extending the technique to ground vehicles and water aircraft
is being evaluated.

In September
1968 the Army was designated the
integrated weapons support manager for the UH-1 aircraft and the T-53 turbine
engine, responsible for providing materiel support for all such equipment used
in the military services. The Army supported the Navy and Air Force through
interservice agreements for the remainder of the fiscal year, pending
implementation of the new agreement early in fiscal year 1970.

Forward
maintenance for aircraft in the battle zone was enhanced during the year with
the development of a family of aircraft airmobile shop sets that permit integration
of aircraft direct support maintenance into operational aviation units. The
sets were issued to the 1st Cavalry and 101st Airborne Divisions (Airmobile)
and the 1st Aviation Brigade in Vietnam, and provided repairmen with the tools
and equipment to perform 80 percent
of the direct support maintenance requirement.

Logistics
Systems

Among
numerous recommendations developed by the Department of the Army Board of
Inquiry into Army Logistics Systems were those relating to improvement of the
logistics systems of Army divisions. Extensive changes in the system were
proposed, along with an increased use of automation. Tests were conducted at
Fort Hood, Texas, and in U.S. Army, Europe, between September 1967 and August 1968,
and
a number of new methods were approved in such areas as management of repair
parts, maintenance of the property book, asset reporting, and inventory
control. Organizational realignments were also adopted that would provide more
effective and efficient supply and maintenance support to the combat
battalions. The changes were in progress in the 24th Infantry Division at Fort
Riley, Kansas, as the year closed, and are scheduled for other divisions in the
United States, Europe, and Korea.

76

Developmental work began in
the fiscal year on an integrated facilities system (IFS) that would provide
structured, accurate, and timely data on Army real property resources and
programs. Such data is used in developing costs associated with various courses
of action and in making decisions related to force structure, force readiness,
and facilities planning and programing. The IFS will provide functional managers
and commanders with data required to manage real property resources. In a
related development, the stationing capability system was completed during the
year. This will provide the Army with an automated system to be used in the
preparation of stationing plans to support capabilities studies. One of its
principal features will be the ability to determine dollar costs associated
with troop stationing plans. This system will be incorporated eventually into
what is called the facilities planning module of the integrated facilities
system.

Under the over-all Program
to Improve the Management of Army Resources (PRIMAR), a system is being developed
to control supply and maintenance activities that are financed for the most
part from the Army's operations and maintenance fund. The system will isolate
key performance indicators, which will be used in conjunction with a simple
reporting system to develop comprehensive budgets by computer, ideally in less
time and with greater accuracy than has been possible in the past.

Management has become ever
more intensive in military operations today. The size, complexity, and cost of
operations, goods, and services have made this so. Contributing to the need for
intensive management are limited budgets, competing demands, high costs,
measured production, accelerated consumption, distant operations, and
worldwide requirements, among other reasons. One of the key elements in
intensive management is an effective reporting system, and one of the equipment
areas that has required close management is that of aircraft components. An
Aircraft Component Intensive Management System was instituted in February 1967,
initially for T-53 and T-55 turbine engines. In 1968, 20 additional critical or
high-dollar value items were added to the system. Testing was completed in
September 1968, and the system has been made a permanent one. By the close of
the fiscal year, 45 high-dollar aviation items had been brought under intensive
management.

Those elements of logistics which directly concern materielrequirements,
assets, production engineering and facilities, supply and distribution, sales
losses, research and development, funding levelsare integrated into the
Army Materiel Plan. This is the basic document used to develop the procurement
portion of the Five Year Defense Program, and items for the budget are selected
from it. A system for the automation of the Army Materiel Plan became operational
during fiscal year 1969. It is used at the commodity commands and the Major
Item

77

Data
Agency at Letterkenny Army Depot, Chambersburg, Pennsylvania. The system
automates a large number of calculations required in the preparation of the
Army Materiel Plan that were previously done manually. It provides more rapid
access to information and response to changes in guidance and permits data to
be updated monthly and retained in computerized form.

Several important concept studies of broad
logistics implications were in progress during the 1969 fiscal year. One deals
with the question of whether the extension of the Army Materiel Command
overseas or some other method would provide the most responsive, efficient, and
effective supply and maintenance support for U.S. forces in oversea areas; the
study concludes that the Army Materiel Command should be responsible for
requirements determination, procurement, distribution, and integrated inventory
management worldwide. Decision has been deferred until communications and data
processing systems that would support the over-all system are evaluated. The
other study, approved in the year, examined the concepts and costs of an
all-air line of communications and compared possible surface and air lines of
communications in the 1970-75 time period when the Air Force C-5A transport
will be available. It was concluded that all-air lines of communication are not
feasible given the projected C-5A availability and problems of vulnerability in
forward delivery; a mixed surface-air concept appears to be the most feasible.

Supply and Depot Management

Wartime
conditions continued to complicate the management and distribution of Army
materiel. The Department of the Army's Distribution-Allocation Committee
continued to control the allocation of critical items of equipment to meet
requirements and priorities around the world. Distribution planning was aided
by the inception of an automated system to display equipment requirements,
inventories, scheduled production, and anticipated losses. From this data a
2-year distribution plan is now compiled, reflecting the planned equipment
status of major Army commands.

The
Army Stock Fund finances much of the materiel that flows through the Army depot
system. Stock fund purchase authority in fiscal year 1969 amounted to $3.7
billion to support an issue program of $4 billion. The purchase program was
about 3 percent less than that of fiscal year 1968, while the issue program remained
essentially unchanged. The Army continued to improve supply management and
control in Southeast Asia, where demands leveled off somewhat, although there
were some increases in connection with the modernization program for South Vietnamese
forces.

78

The Warehousing Gross
Performance Measurement System (described in the last several reports) is used
to measure productivity and manpower utilization throughout the Army depot
storage system. It has been implemented for both general supply and ammunition
storage activities at all Army Materiel Command depots, and for general supply
storage activities in Europe and the Pacific. It will be applied to ammunition
storage in Europe in July 1969 and in the Pacific in January 1970. A gross
performance measurement system for inventory control points will be installed
in the Army on July 1, 1969. Use of the system will improve efficiency and
reduce operating costs of depot storage and supply management operations in the
Army.

Modernization of the depot
storage system in the United States began in fiscal year 1967 as part of a
$14.2 million 3-year program to equip depots with the most efficient
materiel-handling systems and provide modern facilities, design capabilities,
and layouts for effective storage operations. Through fiscal year 1969, $6.2
million had been spent on procurement of handling equipment and alterations to
facilities, while $1.7 million was obligated for military construction under
the program. If Army requests in the 1970 and 1971 budgets are approved and the
modernization program is completed, depot storage operating costs will be
reduced by about $3 million annually.

Depot
organization as well as modernization was a subject of attention in the fiscal
year. In May 1969 a revised depot organization regulation was issued to assist
depot commanders around the world to establish and maintain a uniform
structure. The standard organization makes more effective use of resources and
takes advantage of the latest organizational experience of the Army. The
advantages of uniformity are evident in some simple statistics. There were 47
Army depots and 35 depot activities in nine countries (United States, Japan,
Korea, Okinawa, Thailand, Vietnam, United Kingdom, Germany, and Italy) on
December 31, 1968, storing some seven million short tons of Army supplies and
equipment and performing such wholesale functions as storage and warehousing,
repair and rebuild, rail and motor vehicle traffic management, stock control,
overhead and support functions, quality control, and property disposal, among
other depot and tenant activities.

Installations

The 1969 Military Construction Authorization Act, approved in July 1968, provided
$449.1 million in new funding authorization for the Army. Although the Congress
approved a total funding plan of $628.1 million, a general reduction of $80
million was imposed, reducing the Army's fiscal year 1969 military construction
appropriation to $548.1 million.

79

The $80 million reduction, made
without reference to specific projects, required the Army to defer temporarily
certain portions of the program. Some already-approved Southeast Asia programs
were reduced and about $40 million in other projects deferred. Since deferred
projects were still required, funds for projects that encountered award delays
were transferred to them.

To comply with the
congressional desire to reduce large unobligated balances, the Army on
September 6, 1968, set March 31, 1969, as the date by which all fiscal year
1968 and prior-year funds would be obligated, and June 30, 1969, as the date
when 1969 fiscal year fund obligation would be completed. The award of
contracts was slowed by rising costs; in many instances, waivers of statutory
cost limitation or redesign were necessary to hold contracts to authorized
limits. Considerable progress was made, however, in reducing the backlog of unstarted projects, and the
unobligated carryover for all work except that connected with the Safeguard
system and Vietnam and Thailand was reduced,by about $80 million. The
reorientation of the Safeguard program and a revalidation of construction
requirements in Vietnam created a reserve for future work in both areas.

The Army in fiscal year 1969
thus had available for military construction a total of $1,057.4 million,
consisting of $548.1 million in current appropriations, $490 million in
unobligated prior-year funds, and $19.3 million in transfers from
appropriations of the Office of the Secretary of Defense. Funds for new work were
available as follows:

(In millions of dollars)

Major projects (excluding Vietnam, Thailand, and Safeguard)

403.2

Vietnam and Thailand

254.6

Safeguard (including planning)

305.0

Infrastructure

53.9

General authorization

1 40.7

Total

1,057.4

1 Excludes $4.1 million advanced against fiscal year
1970 appropriations.

Obligations for major
projects totaled $248.7 million in areas outside of Vietnam and Thailand and
excluding Safeguard. Some $84.3 million was obligated for new work in Vietnam
and Thailand, while $44.3 million was obligated for infrastructure, $26 million
for Safeguard, and $31.5 million for planning, minor construction, and access
roads.

Appropriations for military construction in
Southeast Asia (as opposed to obligations) in fiscal year 1969 included $131.7
million in new obligation authority for construction in Vietnam and $7.5
million for construction in Thailand. The general reduction of $40 million assigned
to Southeast Asia, plus a deferral of apportionment imposed by

80

the Office of the Secretary of Defense, reduced the
Vietnam and Thailand allocations to $40.5 and $4.3 respectively. New
obligation authority for construction projects in the United States and other
oversea areas in support of Southeast Asia operations totaled about $10.9
million. Over $1.3 billion in regular, contingency, and military assistance
funds have been applied to military construction in Southeast Asia in the four
fiscal years 1965-69.

The Army's military
construction program consists of three basic elements: providing facilities
that installations need but do not have, replacing aged and obsolete
facilities, and improving and modernizing existing facilities. At the present
time, the permanent assets at fixed Army installations have a total value of
about $14.4 billion. If these facilities were depreciated over an average life
of 50 years, it would require yearly expenditures of about $288 million to replace
them on a cyclic basis. Based upon an assumed long-range permanent Army peacetime
strength of 925,000, there is a facilities deficit of about $7.5 billion
(excluding Safeguard construction). It is the Army's objective to invest $800
million in construction funds annually to overcome the deficit in about 10
years. By way of comparison, only $57 million was authorized and funded by
Congress in fiscal year 1969 for replacement and modernization. Further
progress has been deferred in favor of meeting the demands of the war.

On April 24, 1969, the
Secretary of Defense announced actions to consolidate, reduce, realign, or
close 36 military installations and activities in the United States. Four are
under Army control. The radio receiver station at La Plata, Maryland, and the
radio transmitter station at Woodbridge, Virginia, were announced for
inactivation by July 1969. A NIKE site at Garfield Heights, Ohio, will be
declared excess by December 1969, while research and development functions at
Frankford Arsenal, Philadelphia, Pennsylvania, will be consolidated with
similar activities at other installations by January 1973. These actions will
result in the relocation of 72 military personnel and the elimination of 758
civilian spaces and will produce an annual saving of $14.2 million.

Approximately $1 billion was expended in fiscal year 1969 for real property
maintenance activities at Army installations, equal to the previous year. Space
in Army buildings decreased by over four million feet as a result of the closing
of some installations. The amount of unexecuted essential maintenance and repair
at year-end was estimated to be $228 million, the same as that for fiscal year
1968.

Real property maintenance in
Southeast Asia was done primarily by contractors. In Vietnam, one firm with a
work force of about 21,000 furnished all normal post engineer support to about
400,000 U.S. Army and allied assistance personnel at 104 locations. The same
firm, with

81

a
force of about 2,800, provided the same type of services to U.S. Army forces in
four areas of Thailand. Another contractor operated and maintained power ships
and distribution systems at four sites in Vietnam.

The
Army, through the Corps of Engineers, provided construction support to numerous
agencies and projects, among them the Air Force (including its Guard and
Reserve), the National Aeronautics and Space Administration, various Department
of Defense agencies, the Military Assistance Program, the Agency for International
Development, the Navy and Coast Guard, national cemeteries, and several foreign
governments. During fiscal year 1969, Army Engineers contracted for
approximately $385 million of construction for these other U.S. agencies and
foreign governments.

Around
the world, the Army controls 14.1 million acres of land that, with improvements
constructed after initial acquisition, cost $12 billion. During the year,
71,194 acres were disposed of that, with improvements, had an original cost of
$106.4 million. Disposal of an additional 5,328 acres having an original cost
of $23.8 million, reported to the General Services Administration during the
year, is in progress. During the period, 1,663,036 acres temporarily not
required for military purposes were leased to private parties, and receipts in
the amount of $6 million were deposited in the U.S. Treasury.

As real estate agent for other government agencies, the Army in fiscal year
1969 acquired 343 land tracts for the Air Force costing $5.4 million and 953
land tracts for the National Park Service costing $5.7 million. Real estate
services were also furnished the National Aeronautics and Space Administration
and the Atomic Energy Commission.

In December 1967 the Secretary of the Army was assigned responsibility for
the homeowners assistance program, under which military or civilian employees
of Department of Defense activities are provided financial assistance to reduce
their losses if they are required to dispose of a home when a military installation
is closed. Through June 30, 1969, 6,584 applications for assistance had been
received and 1,947 applicants had been given financial assistance totaling $6.779
million. Some 786 mortgages totaling $6.296 million were assumed, while 2,010
applications were rejected.

Due to the suspension of work on the Sentinel program and the subsequent redirection
to Safeguard, major installation redesign became necessary. The changes were
required by revised assessments of the threat, modifications to technical and
tactical criteria, and transfers of site locations, and the principal ones concerned
power requirements, the number of radar faces, the size of the missile site
radar building, the launch cell design, and the number of missiles deployed
at sites. The architect-engineer contracts for the major facilitiestwo
radars and two power

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plantsare being revised and design of the first sites should be completed
by January 1970.

Transportation

In fiscal year 1969 the amount of Army cargo and numbers of Army passengers
moved varied slightly from fiscal year 1968. The Military Sea Transportation
Service moved 96 percent of the cargo that was shipped18,901,600 measurement
tons, about 65,100 less than the previous year's quantity. The Army also shipped
about 318,800 short tons by air, somewhat over the 1968 level.

Passenger movement continued to reflect the policy of using the most expeditious
means to move personnel and save man-days of travel. During the year, 1,698,100
Army-sponsored passengers were transported worldwide, 1,590,600 by air and 107,500
by sea. The ratio of passengers using airlift increased along with the number
of passengers moved.

Restraint in the use of premium cargo transportation was also maintained through
the year under the airlift challenge program, which provides for automatic review,
screening, and challenge of requests initiated by field commands. An average
of over 2,000 shipments per month was diverted from airlift to sealift, at an
estimated cost avoidance of about $12 million per month. The diversions were
made without detriment to delivery dates.

There were further refinements and improvements in the Military Standard Transportation
and Movement Procedures (MILSTAMP) program during the year. The most significant
concerned improvements in the procedures for moving dangerous and hazardous
cargo by ocean carrier.

The safe shipment of conventional explosives, nuclear
weapons, and chemical agents is a matter of continuing concern to the Army. In
the field of transportation safety there were several developments during the
year. Escort responsibilities for nuclear weapons were transferred from the
Continental Army Command to the Army Materiel Command, and installation
commanders were authorized to grant refuge, in case of need, to shipments of military
explosives or hazardous materiels covered by a government bill of landing.

The proposed plan to move obsolete and unserviceable
chemical munitions from the Rocky Mountain Arsenal and other installations by
rail to the east coast for disposal at sea came to public attention through
congressional interest. As a result of public discussion over potential
hazards, shipment was halted until the National Academy of Sciences could study
the matter and make recommendations. The academy determined that the most
appropriate disposal procedure would be to defuse the explosive devices and
detoxify the chemicals in the gas bombs, and suggested that this method be
considered for all materiel scheduled

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for disposal. Should this prove to be impractical
because of preparations already made for the disposal at sea, the academy
indicated that the original Army plan be carried out. As the year closed, the
Department of Defense was evaluating the academy's recommendations and disposal
plans were being revised. Decision on disposition of the obsolete stock was in
abeyance.

The Army's containerization
program moved forward during the fiscal year. In November 1968, contracts were
let for the purchase of 2,000 containers, 8'x8'x20' in size (to be called
MILVANS), and 1,750 matching chassis. Initial deliveries began in May 1969.
Meanwhile, a pilot operation was developed, based on the initial procurement of
containers and chassis, to test the possibilities of an Army-owned MILVAN
fleet.

The Army has long studied
the methods and means by which to cross water, which often proves to be a
formidable obstacle in military operations. The roles and missions that might
be assigned to transhydro craft in the 1975-85 decade were the subject of a study
plan prepared during the fiscal year by the Combat Developments Command. For
study purposes, transhydro craft were considered to include those which float
on the surface, those supported by air cushion or foils, and those that fly
over water. In May 1969 a steering committee met to consider the study plan
against the possibility that approval would permit initiation of the study in
the first quarter of fiscal year 1970.

The Defense Appropriation
Authorization Act for fiscal year 1969 (Public Law 90-500) restricts the
purchase of buses from foreign manufacturers primarily for reasons of economy
and the national interest. The restrictions apply whether the buses are
purchased, rented, or leased for transportation services. To comply with the
new provisions, buses of foreign manufacture used by the Army will be replaced
by U.S. equipment.

The extensive
requirement for lighterage in Southeast Asia has practically depleted the
Army's supply of landing craft. Except for 40 LCM-8 craft received through new
procurement in 1967, those now in the Army supply system were procured in the
1950-52 period. They are becoming increasingly difficult to repair and provide
with spare parts. Landing craft in Vietnam have had minimum maintenance and
hard use in both supply and tactical operations. In view of their importance in
the logistical chain, the Army is presently preparing a procurement plan for
the Five Year Procurement Program.

Support Services

Although the various types
of Army support services are often considered to 'be routine, the fact that
they deal with essentials makes them interesting, and especially so during
wartime. The sheer magnitude is

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illustrated by the fact that
the Army, during fiscal year 1969, had 4,471 troop dining facilities in operation
worldwide, backed by 26 central meat-processing facilities, 12 central pastry
facilities, 16 garrison bread bakeries, and many additional field facilities.
There were also 153 commissary stores serving Army families worldwide, with
annual sales in excess of $535 million; 112 issue commissaries supplied troop
messes with subsistence valued at over $508 million.

A cumulative
total of 1,138,951 interments have been made in the 85 national cemeteries
under Army jurisdiction, 39,811 of them during fiscal year 1969; 2,080 of these
are Vietnam casualties. Among the 85 cemeteries administered by the Army, 55
have gravesites available, while 30 others have space only for Vietnam
casualties, previously reserved gravesites, or second interments in existing
graves under the single gravesite policy.

The 90th
Congress failed to complete action on the proposal that the National Cemetery
System be transferred to the Veterans Administration. The legislation was
introduced once again as the 91st Congress reconvened in January 1969.

Work continued
during the year on the expansion and improvement of Arlington National
Cemetery. Contracts have been awarded for a visitor center and parking lot,
remedial landscaping, the development of 80 acres of additional burial area,
and a water distribution system for the entire cemetery. The permanent lighting
system for the Tomb of the Unknown Soldier and facade of the Memorial
Amphitheater was completed in March 1969, a contribution of the American
Legion on its 50th anniversary. President Nixon presided at the dedication
ceremony in Washington, D.C.

The 1970 budget contains a request for $258,000 as the federal government's
share of costs associated with construction work at the Arlington Cemetery gravesite
of the late Senator Robert F. Kennedy. The Kennedy family will assume the costabout
$419,200for construction of the gravesite memorial.

During the fiscal year, excess property of various kinds and in various locations
at home and overseas, with an acquisition cost of $1.5 billion, was available
for disposition by Army property disposal activitiesby redistribution,
transfer, donation, sale, or other authorized action, depending upon the nature
of the property. Usable property that cost $238 million and 420,000 short tons
of scrap were sold; proceeds amounted to $53 million, as against $29 million
for operating the disposal program. Stocks of usable property eligible for disposal
increased during the year from $375 million to $502 million. Most of the increase
is at Army depots in the United States and comprises returns from Southeast
Asia, disposal of stocks resulting from refinements in the supply system, and
munitions stocks awaiting disposal.